Tropicana, one of the most recognizable orange juice brands in the U.S., is struggling financially and may be headed for bankruptcy due to supply shortages, extreme weather, and shifting consumer preferences.
Tropicana Brands Group, which also owns Naked and KeVita, has seen declining sales and profits.
According to financial services publication Debtwire, the company’s revenue fell by 4% last quarter, while income dropped 10%.
PAI Partners, a European private equity firm that took control of Tropicana from PepsiCo four years ago, recently provided the company with a $30 million emergency loan.
Financial analysts suggest this indicates PAI is a “lender of last resort” and has little confidence in the company’s future.
PepsiCo, which still holds a minority stake in Tropicana, recently wrote down its investment by $135 million.
The challenges facing Tropicana stem largely from declining orange production.
Florida’s orange groves have been devastated by more intense hurricanes and a persistent citrus disease, while droughts in Brazil have further limited supply.
The U.S. Department of Agriculture expects this year’s orange production to be the lowest in 88 years.
At the same time, consumer preferences are shifting away from orange juice. Many Americans are choosing alternatives such as teas, sparkling water, and energy drinks, which often promote functional health benefits.
Tropicana was founded in 1947 by a Sicilian immigrant who pioneered frozen concentrated orange juice.
However, with ongoing supply shortages and changing market trends, the company now faces an uncertain future.
